This issue has puzzled many sellers who earn income in South Africa—if taxes have already been paid on that income in South Africa, do they have to pay taxes on it again upon returning to China? This article explains the tax rules for income earned outside of China.

💡 Not sure if you need to report your South African income in China? Add WeChat ID qcygscszk or call 18676749275, and send [Cross-Border Tax] to get a free one-on-one assessment.

I. Basic Rules Governing Foreign Income in China

China has implemented “The ”Global Taxation” Principle, meaning that the worldwide income of Chinese tax residents (Chinese citizens or individuals who have resided in China for at least 183 days) should, in theory, be reported to the Chinese tax authorities.

The key term is ”tax resident.” If you live in China on a long-term basis and are a Chinese tax resident, your income from South Africa would, in theory, need to be reported (though there is a tax credit mechanism in place).

II. The Tax Credit Mechanism Under the China-South Bilateral Tax Treaty

China and South Africa have signed a tax treaty (which entered into force in 2001), the core mechanism of which is “Credit System”: Income tax already paid in South Africa may be credited against the tax owed in China to avoid double taxation.

Simply put: Since you’ve already paid corporate income tax in South Africa, when you file your tax return in China, the tax paid in South Africa can be deducted from the tax owed in China. The amount you actually need to pay in China is the difference between the ”Chinese tax rate” and the “South African tax rate” (if any).

Note: This credit mechanism applies toIncome Tax, excluding VAT (there is no double taxation issue regarding VAT in either country).

📌 Want to learn about the specific tax credit rules and procedures under the China-South Africa Tax Treaty? Add WeChat ID qcygscszk and send [Tax Treaty] to receive detailed instructions.

III. Practical Compliance Recommendations

✔️ Retain the South African tax clearance certificate: Annual South African corporate tax returns and tax payment records must be retained in their entirety to serve as supporting documentation for tax credits during audits by Chinese tax authorities.

✔️ Reporting of Foreign Accounts (CRS): China has joined the CRS (Common Reporting Standard), so information about your account with FNB in South Africa may be automatically shared with Chinese tax authorities.Not filing a report does not mean it will go unnoticed.

✔️ Distinguishing Between Business Income and Personal Income: Profits from a South African company remain at the corporate level and are separate from your personal income. Only when you withdraw funds from the South African company in the form of ”dividends” does that constitute income at the personal level, at which point you are required to file a personal income tax return.

IV. A Common Misconception: Using a South African Company to Avoid Chinese Taxes

Some people believe that ”if you register a company in South Africa, you won’t have to pay taxes on that money in China”—That's wrong. If you are a Chinese tax resident and the actual controller of a South African company, the Chinese tax authorities may, throughControlled Foreign Corporation (CFC) Rules...requiring you to report the company's retained earnings.

Legitimate cross-border tax planning does exist, but it must be tailored to your specific circumstances under the guidance of a professional tax advisor—it’s not simply a matter of ”setting up a company overseas and calling it a day.”

📞 If you’re planning a cross-border tax structure and want to avoid double taxation or steer clear of CFC pitfalls, feel free to contact Qicaiying for a professional solution. Simply send the message 【Cross-Border Structure】 via WeChat to qcygscszk.

WhyWhy Choose Qi Cai Ying?

What Can We Do for You—

South African Company Registration (CIPC): A valid business address that can be verified during on-site KYC checks by the bank; not a virtual or registered-only address.

Opening a Bank Account (FNB, etc.): We’ll help you schedule your remote in-person interview and prepare the necessary documents—so you won’t have to figure it out on your own.

Takealot Cross-Border and Local Store Onboarding: We provide end-to-end support—from KYC documentation to store operations—not just help with submitting documents

South African VAT Registration and Tax Filing: SARS-Compliant Filing and Regular Bookkeeping to Eliminate Potential Tax Risks

Johannesburg Local On-Site Team: Receiving government correspondence, assisting with bank verification, handling emergencies, and maintaining a permanent local presence

Why You Can Trust Us—

Hong Kong Licensing Qualifications: Three licensed secretarial firms certified by the Hong Kong Companies Registry—not ordinary agencies—that possess the qualifications to serve as statutory secretaries.

In-House Accounting Firms: 1 self-operated Hong Kong accounting firm + a Greater Bay Area accounting firm; audit reports are not outsourced

Endorsed by Industry Associations: Vice President Member of the Shenzhen Bookkeeping Services Association; Board Member of the Shenzhen Cross-Border E-Commerce Association

Founded in 2015, we have served over 500,000 small, medium, and micro enterprises with a team of over 400 professionals, including lawyers, CPAs, tax consultants, and cross-border compliance experts. Our core team members have an average of 8 to 15 years of industry experience.

Global Presence: Headquartered in Shenzhen, with branch offices in Beijing, Shanghai, Guangzhou, Hangzhou, Hong Kong, Southeast Asia, and the United States

For more information on opening a store on Takealot or registering a company in South Africa, please contact Qicaiying:

Cell Phone / WeChat: 18676749275 (WeChat ID: qcygscszk)